Locals seek bargains; U.S. sales reported sluggish

Consumers across the nation increased their spending slightly – 0.7 percent – in the eight weeks before Christmas, according to a SpendingPulse report from MasterCard Advisors in Purchase, N.Y. That's down from 2 percent over the same period last year.

The preliminary report measured payments with credit cards, cash and checks in apparel, electronics, luxury items, jewelry and furnishings at brick-and-mortar stores as well as online from Oct. 30 to Dec. 24.

The study is one of the early national reports on sales and spending during the holiday season. It comes on the heels of a Dec. 20 report from ShopperTrak, which lowered its forecast for holiday sales for November and December to a 2.5 percent increase from a 3.3 percent increase.

Still, the good news for Southern California is that the West fared better than some other parts of the nation. Holiday spending rose the most in the South Central region at 2.6 percent, followed by the Pacific and Southeast regions at 2.4 percent, according to the SpendingPulse report.

"The Northeast, mid-Atlantic and North Central regions of the country all lagged the national average growth, while the Southern and Western regions of the country experienced more positive holiday shopping seasons," said Michael McNamara, global solutions leader for MasterCard SpendingPulse.

"You really did have two kinds of results, depending on the region – one had a relatively negative season, while the other was more in line with the lower end of expectations."

Superstorm Sandy played a role in dampening spending, particularly on the East Coast, analysts said.

"Given that the mid-Atlantic and Northeast regions account for about 24 percent of total U.S. retail, if those regions go negative, they definitely have an impact on the overall numbers," McNamara said.

In addition to the recent hurricane, the mass shooting at Sandy Hook Elementary School in Newton, Conn., and the absence of a resolution on the "fiscal cliff" negotiations contributed to the shortage of Christmas spirit, said Marshal Cohen, chief industry analyst for the NPD Group.

"The weekend was fairly busy for retailers, but not really enough to make a great season for them to get all excited," Cohen said. "They've got work to do."

And not much time left to do it. Returns and exchanges draw people back into stores and create opportunities for consumers to buy something else – often more expensive.

Shoppers will be looking for promotions and heavy discounts if they're going to self-gift, Cohen said.

The attempt to woo consumers resumed Wednesday, one of the 10 busiest shopping days of the year, as local shoppers trickled into stores to return or exchange gift items or make new purchases.

At The Market Place in Tustin, the parking lot started getting busy around 11:30 a.m., as shoppers filled up spaces at the sprawling complex.

By noon, Dinh Le of Santa Ana came out of Toys R Us with a giant box and took several minutes to wedge his purchase into the trunk of his car. Inside was a $179 red Ferrari F430 ride-on toy for his 4-year-old nephew.

Le said his holiday shopping budget of $1,000 was unchanged from last year, as he saw no reason to increase or decrease it.

Jo Pledge of Orange emerged from REI with a cozy sweater for an upcoming ski trip to Whistler, British Columbia. Although Pledge made warmth her top priority, she also hunted for a deal.

"I would have gagged at the original price, but the sale price was reasonable," she said.

Stocks of major U.S. retailers including Abercrombie & Fitch, Sears Holdings, Urban Outfitters, Limited Brands, Nike and Gap were all down. Handbag maker Coach, a bellwether of the luxury market, plummeted $3.39 to $54.13. It lost nearly 6 percent of its value, more than any other company in the S&P 500.

Online retailer Amazon.com, which helps analysts get a read on the entire retail market, lost nearly 4 percent, falling $9.99 to $248.63.

Plodding retail sales are a concern because consumer spending accounts for roughly 70 percent of the U.S. economy. When shoppers pull back on spending, that can take a chunk out of company earnings, which in turn pushes down the stock market